Ah, adulting. That glorious (terrifying?) transition into the land of independence, responsibility, and…wait, what’s this? Bills? Rent? Surprise medical expenses?
We meticulously craft spreadsheets, categorise expenses, and vow to stick to the plan… only to find ourselves bewildered weeks later splurging on an emotional-support-vacation. (Just me?)
But fear not, fellow financial misfits! My journey, littered with the remnants of several failed budgets, has finally led me to a place of financial clarity.
Through a shift in mindset and the implementation of some key practices, I’ve cracked the code on not just creating a budget, but actually sticking to it.
This article dives deep into the reasons why budgets fail so often.
I’ll explore the psychology of successful money management, and give you actionable tips to create a personalised spending plan that works for you.
So, grab your chai (or whatever you use to self-soothe), and let’s get adulting!
And one of the biggest culprits behind failing budgets is a psychological phenomenon known as the “ostrich syndrome.”
Take the ostrich who is faced with danger, burying its head in the sand, with the logic of “if I can’t see the predator, it can’t see me”.
This might seem like an obviously foolish strategy for the ostrich, but many of us do it with our personal finances (and it’s probably, in most cases, why budgets fail).
We avoid anything related to your situation – letters from the bank pile up unopened, we “contactless” tap our cards or phones without looking at the till, and budgeting apps remain unopened for months on our phones.
This behaviour is no small issue.
It stems from a deep aversion to taking responsibility for our financial situation. And in my opinion, is probably the number 1 reason why budgets fail.
It’s easier to remain blissfully ignorant than confront the harsh reality of mounting debt or dwindling savings.
In many cases, this avoidance is rooted in childhood experiences. Perhaps your parents fought constantly about money, creating a negative association with finances.
Maybe you witnessed a loved one struggle financially, and the fear of a similar fate fuels your unwillingness to confront your own situation.
For some, budgeting can feel like a symbol of “adulting,” a responsibility they’d rather avoid. They might crave the carefree spending habits of their youth.
Clinging to financial irresponsibility may be a way to hold onto a shred of ease in an adult world fraught with anxieties.
Ignoring your finances can also manifest in impulsive spending sprees, a desperate attempt to fill a void with material possessions.
It’s a self-soothing technique that likely has its own set of deeply rooted causes like growing up in poverty/ austerity or in a family that only expressed love with things.
Ostrich syndrome, and all the other unconscious money beliefs and habits we have, often gets so out of control that our brain starts to do what’s known as “magical thinking”.
This is adopting a belief that the complicated web of financial problems we spun will somehow magically disappear.
All of these behaviors are ultimately self-defeating and hinder any attempt at creating a sustainably money life.
But there is a way out.
What you need is a little bravery to uncover and confront these secret money beliefs that have been ruling you from the shadows.
Here’s how.
How To Stick To A Budget:
Examine Your Money Mindset
One of the most powerful, yet often overlooked, ways to stick to a budget is by understanding your own money mindset.
Those deeply ingrained beliefs about money, formed through childhood experiences, societal messages, and family dynamics, can have a profound impact on your spending habits.
Uncovering these hidden beliefs is like shining a light on the puppet master pulling the strings of your finances.
You’ll finally have an answer to why you overspend on credit or how you end up with ten new pairs of shoes every month. It’s probably also the leading cause of why budgets fail.
This process won’t be a quick fix.
Facing challenging memories and confronting limiting beliefs can be difficult, but it’s arguably the most worthwhile investment you can make in your financial future.
Trust me, I speak from experience here.
But remember, a transformed money mindset isn’t just about creating a budget that works – it’s about rewriting the narrative of your relationship with money, paving the way for long-term financial security and freedom.
Practical Tips
(1) Book Recommendation
“The Energy of Money: A Spiritual Guide to Financial and Personal Fulfillment” by Dr. Maria Nemeth.
I read and did the exercises from this book a few years back and it honestly was a wonderful starting point.
It guides you through exercises to identify your relationship with money and rewrite any limiting beliefs holding you back.
(2) Therapy & Inner Child Work
What broke through the barriers for me was therapy and, in particular, inner child work. Particularly, working through John Bradshaw’s book “Homecoming.”
It can be incredibly valuable (though very tough) unearthing those early experiences. But there is nothing better than to understand what long-held beliefs might be shaping your financial decisions today.
(3) Talking to Family
Talking openly and honestly with safe and supportive family members about their money habits can shed light on your own financial beliefs.
Siblings and parents, especially, would make interesting case studies. Especially because it might be easier to see where they’re going wrong than to analise your own beliefs and habits.
Of course, only do this if you have safe, helpful, and generally loving family. Otherwise, you might be setting yourself up for more failure.
Another Way To Stick To A Budget:
Work Your Self-Trust Muscle
Past budgeting failures can chip away at our confidence, leaving us doubtful about ever achieving financial control.
This negativity can create a self-fulfilling prophecy – we don’t truly believe we can succeed, so we subconsciously sabotage our efforts, leading to another letdown.
Rebuilding self-trust is the cornerstone of financial mastery. When we believe in our ability to manage our money, we’re more likely to make conscious choices, stick to our plan, and adapt as needed.
So, how do we rebuild this trust? Start small.
I committed to flossing every night as my goal and have been doing so for months, come rain, shine, or fatigue.
Sometimes, that act of flossing is the most important thing I’ll do that day. It’s nothing to do with dental health. It’s everything to do with showing up for myself, honouring my word, and growing my self-trust muscle.
Over time, this small commitment has made way for larger commitments and I now have the confidence to tackle any of life’s challenges knowing I can trust what I say.
Ideas for Small Self-Commitments
Note: These self-commitments should ideally be daily and quite easy to incorporate into your life. Examples include:
- make your bed every morning
- track at least one expense every day
- reflect on your day for 10 minutes before bed every night
- drink a tall glass of water first thing when you wake up
Why Budgets Fail #2: You Don't Know Where Your Money Is
Facing your personal finances can feel like staring into your grandma’s messy attic.
Sure, you might harbour some hope of forgotten treasures to be found. But mostly, it’s just stacks of boxes full of sentimental but low-value items, and a general sense of overwhelming disarray.
This lack of clarity is often the culprit behind financial paralysis and why budgets fail more often than they work.
Multiple accounts, uncategorised transactions, and lingering receipts can create a tangled web that feels impossible to undo.
It’s a major reason why we’re too overwhelmed to even try to create a budget in the first place!
I’ve done enough therapy to realise that this financial messiness is often “deliberate”: it’s a subconscious strategy to avoid the discomfort of taking responsibility by hiding the truth of the situation under a layer of confusion.
By keeping things murky, we create a flimsy shield against the perceived “hard part” – taking control and building a secure financial future.
How to Stick to a Budget:
Consolidate Accounts
By minimising spending cards (ideally to one or a maximum of two), you create a clear and manageable picture of your finances. You also lessen the chances of your budget failing from sheer overwhelm and chaos.
Gone will be the days of guessing which card has what balance, or puzzling over mysterious transactions from forgotten accounts.
But also gone will be the days of a false sense of security because it’s easier to imagine that there is a hidden well of money somewhere else.
Simplifying your finances reduces the risk of overspending and the mental strain of juggling multiple balances.
You gain a realistic and empowering view of your financial situation, helping you to make informed decisions about your future.
Another Way To Stick To A Budget:
Automate Tracking
Keeping tabs on your spending doesn’t have to be a daily chore. Many banks and credit card companies offer built-in budgeting tools that automatically categorise your transactions.
Additionally, you could also go for one of the popular budgeting apps like YNAB (You Need A Budget) – , or the more colourful Spendee. You can connect your financial accounts, scan receipts, and categorise them for a more hands-off tracking process.
Although this would probably work for a lot of people, I have not managed to keep a budget with mobile apps because they’re just too easy to ignore.
[Also, beware before you go premium, that not all bank accounts are supported, and not all of the spending is tracked accurately. You may need to go in there and manually recategorise some items.]
What has worked for me is a simple Google sheet with my monthly budget. I jointly keep track of our expenses with my husband twice a month (on the 15th and on the last day of the month). This keeps us regularly engaged with our spending habits, while not desensitising us with notifications every day.
You will have to try different methods and choose what works best for you.
Why Budgets Fail #3: Unrealistic Budgeting Goals
While the allure of a complete financial overhaul might be tempting, diving headfirst into a super restrictive budget are often a big reason why budgets fail.
Like setting an unrealistic goal of brown-bagging lunch every single day – only to have the monotony drive you to a weeklong pizza spree that obliterates your entire budget. (Just me?)
If you often fall into this “all or nothing” approach, it might be because you opt for self-punishment as a way to get yourself back in line for past missteps (see Point #1 on Unconscious Money Beliefs). However, guilt and deprivation are not sustainable motivators.
The key to success is taking a gentler approach like you would with a loved one. Think of it like training for a marathon – you wouldn’t expect to run 26 miles (42 km) on your first day. Instead, you gradually build endurance and celebrate each milestone along the way.
The same applies to your finances. Start by identifying a few small, achievable changes. Maybe it’s brewing coffee at home instead of grabbing a daily latte, or setting a weekly limit on takeout meals.
As you build confidence and self-trust, you can gradually add more challenges – like tracking every expense or exploring ways to save on your phone bill.
This incremental approach has the power to turn financial management into a journey of positive change, not the usual self-hate-and-flagellation fest it can quickly descend into.
Remember, it’s not about immediate perfection, it’s about building healthy habits that will lead to long-term financial well-being.
How To Stick To A Budget:
Track Before You Budget
Before sitting down to set your budget limits, it is really important to track your spending.
Like a scientist gathering evidence, record what you spend on different things for a month or two without trying to change your habits too much (don’t cheat).
Bonus points if you can identify some of the feelings you had when you made some of your recurring but unnecessary purchases (like takeout, or shoes).
You might feel like you’re wasting valuable time when you could be setting a firm budget cap, but trust me, the insights will be truly invaluable.
Tracking really helps to reveal your true spending habits, and areas where your money might be slipping through the cracks (like, who know that Starbucks could be it’s own budget category?).
Armed with actual numbers, you can set realistic and achievable budget goals instead of arbitrarily allocating budget amounts to different things.
Tracking is necessary to set incremental, personalised goals that address your actual spending patterns, not a hypothetical ideal. This data-driven approach sets you up for success, making your budget feel less like a restrictive burden and more like a roadmap to financial freedom.
Why Budgets Fail #4: You Don't Have A Financial Support System
Budgets can easily crumble under the weight of a negative social circle or a lack of support. Imagine trying to save money while your friends encourage spontaneous shopping sprees! The temptation or social pressure to fit in can be a prime reason for why budgets fail.
This is why keeping your budgeting efforts a secret from loved ones can actually hinder your progress. Open communication and shared financial goals are essential for success.
When your partner or close friends understand your financial aspirations, they can offer encouragement, hold you accountable, and even join you on your budgeting journey.
Think of it as a financial support group – by sharing your goals and struggles with a supportive network, you create a safety net that empowers you to overcome challenges and celebrate victories together.
So, if you have a tendency not to ask for help (hello, Ms. Independent!), or simply be super private, I encourage you to
(1) seek help from a therapist, because you’re shooting yourself in the foot, and
(2) ditch the secrecy!
There is power in numbers. No (wo)man is an island.
How To Stick To A Budget:
Working With An Accountability Partner
Teaming up with a financial partner, like a spouse or roommate you share expenses with, can be a budgeting game-changer.
Having someone by your side creates a powerful sense of accountability. Discussing goals, tracking spending together, and celebrating milestones creates a supportive environment where you’re less likely to stray from your financial path.
Plus, being “frugal” together normalises responsible spending and reduces the social pressure to keep up with others.
However, remember that co-budgeting success hinges on a safe and reliable partner – as well as someone who’s willingly participating, not coerced.
This shared journey is all about growth and building self-trust, so you want to stay away from people who bring out the fear of judgment or failure in you.
The ideal co-budgeting partner is someone who celebrates your progress, no matter how small, and understands that perfection is an unrealistic goal.
So, choose your financial teammate wisely – the right partner can turn budgeting from a solitary chore into a collaborative and empowering adventure.
How To Stick To A Budget:
Building Accountability Without A Partner
Even without a dedicated financial partner, building accountability is crucial for budgeting success. Embracing solo budgeting can be a beautiful example of self-love and care.
Schedule regular check-ins with yourself, reviewing your spending habits and celebrating your achievements.
Consider creating a visual board where you track your progress by adding a sticker or star for every week you stay within your limits or having set rewards for good budgeting behaviour.
You can also consider online budgeting forums and communities where you can share your financial goals and challenges with like-minded individuals.
These virtual support systems (which you can find on Facebook or straight up Google) offer encouragement, advice, and a safe space to celebrate victories, big or small.
Why Budgets Fail #5: Building A Bad Budget
A poorly constructed budget is one of the more obvious reasons for why budgets fail.
A common pitfall is underestimating your needs. Life throws curveballs, and a budget that doesn’t account for unexpected car repairs or medical bills is destined to crumble.
On the flip side, overestimating your income (like forgetting to subtract your taxes and deductibles, or overestimating your variable income) can create a false sense of security.
And there are budgets which lack structure or a clear plan. Without designated categories for essential expenses, savings goals, and even a little “fun money,” sticking to a financial plan feels like an uphill battle.
These foundational flaws set the stage for budget failure, leaving you feeling discouraged and lost in the financial wilderness.
How To Stick To A Budget:
Start With Your Needs
Uncovering your actual needs takes a blend of self-awareness and financial forensics.
Start by dissecting your core expenses – housing, utilities, groceries, and transportation. These are your non-negotiables for life and well-being.
Then, embark on a spending detective mission. Track all your expenses for a couple of months, separating essential costs from the “want” category. Are there areas where “wants” masquerade as needs?
Did that daily latte habit sneak in unnoticed as a “need”?
On the other hand, your CrossFit membership might be so beneficial to your mental, social and physical wellbeing that it can be recategorised as a “need”.
(Though you could maybe cut back on all the gym outfits).
It’s all very specific to you.
By combining honest self-reflection with hard data, you’ll gain a clear picture of what you truly need to live comfortably. This’ll ensure your budget is realistic, sustainable, and doesn’t leave you feeling deprived.
Another Way To Stick To A Budget:
Allocation Strategies
When it comes to allocating your hard-earned cash, there are several budgeting strategies that can help you with financial harmony. Here are 3 for inspiration:
The 50/30/20 rule
A classic for a reason. It advocates allocating 50% of your income to essential needs like housing and groceries, 30% to flexible spending like entertainment and dining, and 20% towards savings and debt repayment.
This balanced approach ensures you cover your bills, have some fun, and prioritize your financial future.
Of course, for those of us overspending on our essential needs, using this strategy might be tricky unless we are prepared to change some pretty major things (like where we live or where we do our groceries).
The zero-based budget
For those seeking a more personalised approach, this strategy involves assigning every dollar of your income a specific purpose (including savings, retirement, investments, and of course, takeout).
It requires meticulous tracking and planning but offers complete control and oversight over your spending.
If you opt for this one, I highly recommend tracking your spending for a couple of months first before setting hard and highly specific number-limits on the different spending categories to avoid feeling overly restricted.
The envelope system
A great strategy for visual learners (and those who need HARD limits?).
Allocate specific amounts of cash (like paper and coins) to designated categories (rent, groceries, etc.) in physical envelopes. Once the cash runs out in a category, the spending stops.
The aim is to encourage mindful spending and preventing overruns but be careful not to turn this into some kind of self-punishment exercise.
What's right for you?
Personally, I have overall financial goals that I am working towards in each of my spending categories and will be reducing the overspend gradually over the coming months.
I have found that being too strict or moving too fast has only caused harsh counter-resistance (of me against me) and that going slow and steady seems to be the way to keep things sustainable.
Choosing the right strategy depends on your financial personality and goals – find one that empowers you to take control of your money!
Why Budgets Fail #6: A Fixed Mindset
A fixed mindset (the belief that intelligence and abilities are predetermined and unchangeable), can be the silent saboteur of your budget.
People with a fixed mindset are often perfectionists who view mistakes as failures and setbacks as evidence of their inadequacy.
This translates poorly to budgeting. When faced with an unexpected expense or a week where they go over budget, they might feel like a complete failure, leading to discouragement and abandoning the budget altogether.
However, someone with a growth mindset who views intelligence and skills as things that can be developed through effort and learning see budget slip-ups as opportunities to learn and adjust.
They bounce back from setbacks, analyse what went wrong, and tweak their plan accordingly.
This flexible (and more optimistic) approach allows them to adapt to life’s curveballs and persevere on their financial journey.
How To Stick To A Budget:
Explore Earning More
Unlike a fixed mindset that sees income as a static number, a growth mindset encourages you to view your earning power as something that can be expanded. This opens doors to exploring new possibilities.
Perhaps you could take on a side hustle to generate additional income, or invest in online courses to develop valuable skills that could qualify you for a higher-paying job.
This proactive approach transforms your income from a fixed limitation to a dynamic force that can be shaped through your efforts and continuous learning.
Hint: if you just read that and thought, “Nope, I don’t have the time/ energy/ ability to do that. It’s just not for people like me,” then you have a fixed mindset, and that should be the first thing you work on!
Why Budgets Fail #7: A Harsh Inner Critic
Budget hiccups are inevitable. Life throws curveballs, unexpected expenses arise, and sometimes that delicious latte just beckons a little too loudly.
But here’s the thing: these setbacks are not why budgets fail.
A harsh inner critic might scream “you’ll never get ahead” after a splurge, tempting you to abandon ship entirely. But remember, a budget is a roadmap, not a rigid train track.
Mistakes happen, and the key to success lies in how you respond. Instead of spiraling into negativity, acknowledge the blip, analyse what caused it (circumstances, feelings), and adjust your plan accordingly.
Maybe you cut back on another category next week, or use this experience to find a cheaper coffee alternative.
By approaching setbacks with a growth mindset and self-compassion, you turn them into valuable learning experiences, not reasons to quit.
Remember, progress and overall consistency, not perfection, is the name of the game!
How To Stick To A Budget:
Embrace The Journey
Budgeting isn’t a one-time fix. It’s a dynamic process, a lifestyle, filled with numerous opportunity for iteration and adjustment.
Your budget will need to adapt to life’s curveballs, setbacks or adjustments. Don’t see temporary shortfalls as failures, but as valuable data points.
The numbers on your spreadsheet aren’t your enemy; they’re simply information, a snapshot of your spending habits. Analyse this information objectively, without attaching negative emotions.
Use it to identify areas for improvement, tweak your plan accordingly, and keep moving forward.
Because financial success is a marathon, not a sprint. Every successful budget is a work in progress, evolving alongside your life.
Another Way To Stick To A Budget:
Celebrate Your Financial Wins
Taking the time to acknowledge your budgeting wins, big or small, is a powerful tool for rewiring your internal narrative.
A simple “well done” to yourself for sticking to your grocery budget or a night in celebrating a debt repayment milestone chips away at negative self-talk.
By acknowledging your financial competence and celebrating your progress, you replace self-doubt with positive self-esteem.
This shift in your internal narrative is key to long-term success.
When you view yourself as someone capable of managing your money effectively, you’re more likely to make positive financial choices and stay committed to your goals.
So, don’t wait for the big win – celebrate every step along the way.
It’s this self-compassion and recognition that lets you rewrite your story from one of struggle to one of financial mastery.
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